Minimum Wage Policy

North Carolina’s minimum wage is $7.25 an hour—an amount which, translated to a full year of work ($15,080), would only net 129% of the federal poverty line for an individual. However, if that individual were the sole earner for a family of two, then that family would be living below the federal poverty line. What impacts might the proposed federal minimum wage policy have on low-wage work in North Carolina? To answer that question we examined how many workers and households would be affected by a minimum wage increase to $10.10 per hour—as has been proposed in Congress.

Our research found that not only DID considerable numbers of North Carolinians earn at or just above minimum wage, BUT nearly 50,000 additional workers aLSO earned less than minimum wage in 2013. This figure has declined significantly as the state has emerged from the recession but is still an arresting measure of especially at-risk workers.

Increasing North Carolina’s minimum wage to $10.10 per hour would result in over $2.5 billion in paid wages being added into the state’s economy annually.

Ripple Effect:

In theory, if the minimum wage were increased to $10.10, individuals earning wages modestly above $10.10 would also receive a wage increase as a result of the so-called “ripple effect.” Our research modeled how much spending power would be added to North Carolina’s economy in the form of wages if individuals earning up to $12 per hour also received a raise. If those individuals were to get a 10% increase in wages that would result in $578,350,000 in additional wages being paid in North Carolina. A 5% increase for those individuals would result in $289,175,000 in additional wages.

Households

In North Carolina, 398,356 households have at least one worker earning between $7.25 and $10.10 per hour. Another 326,109 households have at least one worker earning at or below $7.25, North Carolina’s minimum wage. This means that over 700,000 households--nearly 20% of total households in North Carolina--include at least one worker who would be impacted by the proposed minimum wage increase.